Mobile operators urge Trai to clear the air on app-based pricing

The Telecom Regulatory Authority of India had last week weighed in on the side of net neutrality and disallowed differential pricing of data services.Gulveen Aulakh&Kalyan Parbat | ET Bureau | February 18, 2016, 08:00 IST

India’s mobile operators have urged the telecom regulator to clear the air on whether they can tie up with Internet apps to offer content to subscribers at differential rates over closed networks.

These queries have been triggered by a potential loophole in the regulator’s recent order on discriminatory pricing that exempts data services offered over closed electronic communication networks (CECNs).

This loophole, fear net neutrality backers and advocates of a free Internet, could be used by telcos to offer data services at differential rates and undo Trai’s objective of disallowing discriminatory pricing of Internet services.

The Telecom Regulatory Authority of India had last week weighed in on the side of net neutrality and disallowed differential pricing of data services.

In a joint letter, the Cellular Operators Association of India (COAI) and Association of Unified Telecom Service Providers of India (Auspi) have asked the telecom regulator to clarify “the concept and scope of a CECN, and how it intends to operationalise it”.

Both telecom lobby bodies have also sought clarity from the sector regulator on whether an Internet-based app provider can offer content for free or at discounted rates to all customers of a mobile carrier, so long as it’s non-discriminatory and delivered over closed communication networks.

A closed communication network can be created without directly connecting to the Internet. “The Internet app provider” in this case would typically be “a provider of education, health or e-governance applications, besides data services like chat, music, movies, video and TV”, said the COAI-Auspi letter.

The telecom industry bodies also urged Trai to clear the air on whether such content can be offered for free or at discounted rates for “both short-term promotions and on a longterm basis”.

“The current (Trai) regulation suggests that a closed electronic communication network can be defined in terms of restricting access of the service to (a telco’s) existing customers,” said COAI and Auspi in their joint letter.

Such restricted access, they infer, “can be achieved in multiple ways, as in by creating virtual private networks (VPNs), or other forms of cloud-based intranets or even by restricting IP (Internet protocol) ranges that can access the service”.

The joint letter comes as mobile operators mull creative ways to hold on to data customers and reduce the impact of Trai’s regulation barring discriminatory pricing of data services.

At the same time, telcos want clarity about the norms as they don’t want to be wrong-footed later. “We don’t want to commit dollar investments unless there is clarity,” said a telecom company executive. The differential data pricing regulation empowers Trai to levy a penalty of Rs 50,000 a day, capped at Rs 50 lakh, on service providers found violating the rules.